Mumbai, May 9 (IANS) Value buying, along with expectations that key economic legislation will get parliamentary approval, propelled the Indian equity markets on Monday.
Consequently, the Indian equity markets surged during the mid-afternoon session. Healthy buying was observed in interest rate sensitive stocks like banks, auto and capital goods.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) was up by 101.05 points, or 1.31 percent, at 7,834.50 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 25,321.83 points, traded at 25,576.07 points (at 1.50 p.m.) — up 347.57 points or 1.38 percent from the previous close at 25,228.50 points.
The Sensex has so far touched a high of 25,608.59 points and a low of 25,302.86 points during the intra-day trade.
The BSE market breadth was tilted in favour of the bulls — with 1,586 advances and 910 declines.
Both the key Indian indices had ended on a flat-to-negative note on Friday. The barometer index had lost 33.71 points or 0.13 percent, while the NSE Nifty had closed lower by 2.05 points or 0.03 percent.
Initially, the equity markets opened on a positive note, as value buying after last week’s consolidation lifted prices.
Besides, expectations that key economic legislation will get parliamentary approval supported the equity markets’ rise.
In addition, investors’ risk appetite was increased after a dismal US non-farm payrolls data reduced the potential for a June rate hike there. The US data for last month showed that the economy created 160,000 jobs, against 215,000 in March.
A US rate hike could potentially lead to a massive pull-back of foreign funds from emerging economies like India. It is also expected to dent business margins as access to capital from the US will become expensive.
“After a week of consolidation, value buying and hopes that more economic legislation will get parliament’s approval lifted prices,” Anand James, chief market strategist, Geojit BNP Paribas Financial Services, told IANS.
“Besides, reduced potential of a US rate hike in June, due to lower non-farm payrolls data boosted investors’ sentiments.”